Comments on: Google as hedge fund

By: IF

IF — Tue, 03 Oct 2006 18:10:26 +0000

Google – the new stock exchange

The web is a weird beast. All this computing power both CPUs and human minds working away in their own little worlds and yet at the same time adding more and more to the huge database that is the…

By: John K

John K — Fri, 01 Sep 2006 21:43:24 +0000

Well, there is no culture at Google that’s capable of dealing with the nature of trading. It would have to be imported. Remember they’re “computer scientists” over there.

In any case, LTCM does apply here, because greed can overpower whatever algorithm the google fundsters came up with. As it did with Nobel Laureates at LTCM.

You don’t think the Googlers wouldn’t be a little overconfident already with their previous history? 40% is low for them. You might need to visit out here more often…

By: Greg Yardley

Greg Yardley — Fri, 01 Sep 2006 19:19:29 +0000

Well, free advice is worth every penny.

But the flaws that brought down LTCM wouldn’t necessarily apply here. I imagine a culture like Google’s would lend itself to algorithmic trading, which isn’t as prone to should-have-known-better unhedged trades made by highly-leveraged fund managers who’ve become overconfident by a previous history of 40% returns.

By: John K

John K — Fri, 01 Sep 2006 16:57:13 +0000

Hey – you in NYC, having come from your old offices in a hedge fund – does the name Long-Term Capital Management ring a bell?

Maybe that’s why Google would be wise to ignore your free advice.

Of course it’s true that the LTCM propeller heads and Ph.Ds didn’t have 1/2 billion queries a day flowing by..

Ah, the temptation to be gods, and hubris isn’t exactly in short supply around there.